Sample deliverable · Before you pay
Sample Contract and Payment Check: What You Receive
This is what the contract and payment check looks like when it reaches you. It maps the companies in the deal, compares the documents, rewrites the two payment clauses and lists what to fix before you pay.
CONTRACT AND PAYMENT CHECK
| Buyer | An overseas buyer. Name withheld. |
| Proposed deal | A first order of custom-made metal parts, paid by bank transfer. |
| Documents reviewed | The supplier's sales contract and its pro forma invoice (the invoice a seller issues before you pay). Also the email with payment instructions and a copy of the business licence. |
| Companies checked | Three. The real report gives each one's registered Chinese name and unified social credit code. |
| Overall | Do not pay yet. Fix the points in section 4 first. |
1. Who is who in this deal
A Chinese manufacturer. It signs the sales contract.
Active. Licence covers manufacturing.A trading company. It issues the pro forma invoice.
Active. Shares a shareholder with Company A.Named in a later email as a "new account".
Not the contract party. Confirm before paying.It differs from Company A's registered address.
Not yet confirmed.- Linked Company A and Company B are related. The registry shows a shared shareholder.
- Mismatch The contract says you pay the seller, Company A. The invoice and the account belong to Company B.
- Open Who will make the parts? The photos may show another company's site.
I did not ask the bank to confirm the account holder. That is outside this service.
2. The documents side by side
| Item | Sales contract | Pro forma invoice | Payment email | Finding |
|---|---|---|---|---|
| Seller | Company A | Company B | Company B | Mismatch. One company must take on the obligations and receive the money. |
| Price | USD [amount] | USD [amount] | Not stated | Match |
| Payment | 30% deposit, 70% before shipment | 30% deposit, 70% before shipment | Asks for 100% now, for a discount | Conflict. Pay only as the contract says. |
| Bank account | Not stated | Company B's account | A "new account", also in Company B's name | Changed once already. Confirm by video call. |
| Delivery | About 45 days after the deposit | 45 days | Not stated | No fixed date |
| Trade term | FOB [Chinese port] | CIF [destination port] | Not stated | Conflict. The two terms put freight and insurance on different sides. |
3. The supplier's terms that affect payment
This check rewrites only the two payment clauses, on the balance and on the bank account. For the other four, it flags the problem. Rewriting that wording is part of a contract review.
Clause 1: Quality
Quality: as per Seller's standard and the approved sample.
The problem. "Seller's standard" lets the seller decide what passes. If the quality term is unclear, Chinese law falls back on national or industry standards, or the usual standard (Civil Code art. 511). Those may not match what you need.
Clause 2: Inspection and objections
The Buyer shall raise any quality claim within 7 days after arrival. Otherwise the goods are deemed accepted.
The problem. If you miss an agreed inspection period, the goods are treated as matching the contract (Civil Code art. 621). A period too short for a full inspection counts only for visible defects (art. 622). You would have to prove that in court. It is simpler to agree a period that fits the goods.
Clause 3: The deposit
30% deposit within 3 days of signing. Balance of 70% before shipment.
30% advance payment within 3 days of signing. The balance of 70% is payable within 5 business days after the Buyer receives (a) a pre-shipment inspection report showing the goods conform, and (b) a copy of the bill of lading.
Why. In China a true deposit (dingjin) is a guarantee. The payer loses it if its breach defeats the purpose of the contract. The receiver pays back double in the same situation (Civil Code art. 587). It cannot exceed 20% of the contract price (art. 586). A 30% "deposit" invites an argument over which rules apply. If you want the deposit rule, call it dingjin, keep it within 20% and say so in the contract. Otherwise call it an advance payment. Tying the balance to inspection keeps your bargaining power until you know the goods conform.
Clause 4: Delivery and delay
Delivery time: about 45 days after receipt of the deposit. The Seller is not responsible for delays caused by shortage of materials, power cuts or other reasons beyond its control.
The problem. "About 45 days" is not a date. The excuse list is wider than force majeure (events no one could foresee, avoid or overcome). With no fixed date, you may have to argue about a "reasonable period" before you can cancel (Civil Code art. 563).
Clause 5: The bank account
Payment shall be made to the account designated by the Seller.
Payment shall be made only to the account in Annex 2, held in the name of the contracting seller. Any change requires a written amendment signed and stamped by both parties. The Buyer is not liable for any delay caused by checking a change.
Why. Fake "new account" emails are a common fraud. A named account and a signed-amendment rule give you a reason to refuse, and a record if something goes wrong. Here the account holder is Company B. So either Company B joins the contract as seller, or Company A confirms in the contract that payment to Company B settles your debt.
Clause 6: Disputes
Any dispute shall be settled through friendly negotiation. Failing that, either party may bring proceedings before the court where the Seller is located.
The problem. The court where the seller is located can work. You can apply there to freeze its assets, and the judgment is enforced where the assets are. The weak point is "friendly negotiation" with no time limit, which a supplier can use to delay.
4. Before you pay
- Ask the supplier to re-issue the pro forma invoice in Company A's name, or to add Company B to the contract as seller.
- Do not accept the 100% "discount" request. Pay only as the signed contract says.
- Confirm the account by video call with a contact you already know. The account name must match the contracting seller.
- Sign the revised clauses in section 3 before the first payment.
- Ask where the parts will be made. Compare the address with Company A's licence. Consider a site visit for a large order.
- Export and keep the full email and chat history, including the account-change email.
5. What this check covered
It covered one proposed deal, three related companies and the documents listed above, within the 20-page limit. It did not ask the bank to confirm the account holder, investigate every related company, include a site visit or rewrite the whole contract.
Appendix: legal sources
Civil Code of the PRC, arts. 511, 563, 585, 586, 587, 621 and 622. Translations are mine and unofficial.
What this sample leaves out
A real report names each company and gives its credit code. It quotes the clauses in Chinese and English. Scope and fee are agreed in writing before the work starts.
Contract and payment check: scope and fee → · Describe your situation →